June 2010 Monthly Archive

Three Concerns: All seem real and leading back to jobs, again

Three drivers of yesterday’s big sell-off and we are back to that again. Another non-farm payroll report is due out on Friday. It seems every month we keep hearing that “this is the biggie”, i.e. it will make or break markets and recovery expectations. Maybe this time there will be a lot of truth in that assessment … Read more

Goldilocks sees her shadow.

Typically when Goldilocks emerges from her bunker, sees her shadow, and returns to the bunker, we can expect six more weeks of recession. But I’d suggest she re-stock her canned foods supply – she could be in there a while. Read more

US/China Symbiotic relationship back in play?

You may remember that the US dollar soared in value in the midst of the worst fears during the credit crunch. It peaked in March of 2009; which not coincidently is when global stock markets and risk assets began to soar in value. Read more

Our G-20 Saviors: Spend your way to prosperity

Interesting that just as the American people may have reached the point of government spending fatigue, as its government heads into the G-20 to tell other countries they need to spend more. Read more

Crying Wolf: The F-Word is Like a Prescription Drug.

Martin Wolf of the Financial Times recently referenced a paper that made the case that fiscal contraction will actually stoke consumer confidence and induce consumer spending that is necessary towards achieving a healthy recovery. Cut spending and taxes, so the argument goes. Read more

No buyer of last resort is a deflationary train wreck

I was reading George Soros’ criticisms of Germany this morning. If the euro experiment fails, it will be all Germany’s fault, according to Mr. Soros (yeah, okay, sure). Read more

Stressed Out

We could refer to our once-upon-a-time Currency Currents that criticized the stress tests administered to US banks, but really we wouldn’t be saying much more than: ‘they were a phony, propaganda-laden strategy that aimed to deceive investors of the obvious risks that remained with US banks.’ Read more

The China currency script?

China pulled the trigger on the quid pro quo of not being labeled a “currency manipulator” by the US government, by announcing a move to a crawling- instead of the effective fixed-peg exchange rate system they have been employing. Read more

Something may not wash?

Quiet so far today…but we keep thinking things still ain’t right out there; this isn’t your father’s usual “recovery” from recession. Inflation, or the lack thereof, and the rising potential for outright deflation continue to nag at us. Read more

“You’re imbalanced!” “No, you’re imbalanced!”

There’s been a specific, yet passive, global contingent led by the US and somewhat supported by Europe, that believes the Chinese yuan is undervalued, that China possesses an unfair trade advantage by keeping their currency tied down. Read more

Like kissing your sister …

I heard about the World Cup opener between South Africa and Mexico and have seen two other “matches” since; all three have resulted in ties. Both Jack and my father-in-law respond the same way – it’s like kissing your sister. Read more

$50 billion here, $50 billion there…Short euro? Be careful here with euro…

The phrase I think originally went something like this: A million here and a million there; pretty soon you are talking real money. We can only dream our government used numbers with so few digits. Read more

About time for JGB fall and USDJPY rise don’t ya think?

Yes indeed, a two-year peak in Japanese Government Bond futures. We think it could be time for money to start flowing out of Japanese bonds and into some relatively riskier investments inside and outside of Japan. Read more

US: Not-so-deficit-hungry anymore

Reading a post from Yves Smith on her blog nakedcapitalism, from where I took the above quotable, she cites a Financial Times article explaining the imbalances that helped set off this collective recession/financial collapse are bound to worsen. Read more

Oh Doji…Maybe the dollar correction is here?

Actually there has been a lot of good news out there in terms of ongoing production and exports, but many are now seeing through the lens of risk thanks to the Eurozone. Read more

US Facing Unavoidable Sovereign Debt Crisis?

Ok, we all know the story (even though it’s been thrown on the backburner with the ongoing implosion of Europe): the US dollar is doomed because of the growing deficits and debt in the United States. Read more

Key Long-term Themes Still in Play but there are Questions

We put together the chart below for a presentation we made back in January this year; it is a visual representation of the four primary underlying themes we think will drive the long-term dollar bull market. Read more

Sooner or later it all comes out in the wash

On Wednesday, I had an opportunity to present a webinar to discuss my current views about the euro. One of the key PowerPoint pages summarized reasons for my continued concern about the euro Read more

A short opportunity in Australia dependent entirely upon others.

You might remember I kicked off the show on Tuesday by touching on the latest Reserve Bank of Australia monetary policy decision: no change to interest rates. Read more

The Gold-Scotch Connection!

Now even Iran is jumping on this dollar bull market… The Iranian central bank has announced that it will sell 45 billion euros from its foreign exchange reserves to buy dollars and gold, China’s official Xinhua news agency reported on Wednesday, citing unspecified Iranian media reports, Reuters reported. Read more

RBA Gets It Started

What did the RBA do? Nothing. And their inaction confirmed what traders have been anticipating: a very unstable foundation for the global economy. Read more